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Today’s Stories: 🥷 Satoshi revealed? 🤔 Should you buy the next MicroStrategy? 💰 How the wealthy invest in BTC
Today's newsletter is 1,202 words, a 6-minute good read.
Satoshi Revealed
Despite the release of HBO’s Money Electric, we are no closer to finding out the identity of Satoshi Nakamoto. Released yesterday, the new documentary claimed that long time core developer Peter Todd was Satoshi after-all.
Unsurprisingly, crypto pundits were quick to call it all fallacy, basically laughing the theory out of the room.
Ki Young Ju @ki_young_ju
The HBO documentary is disgusting.
It’s baffling they reached this conclusion when all the #Bitcoin experts disagree.
It’s like making a flat-earth documentary without review from scientists and promoting it as ‘unveiling Earth’s secrets.’
4:33 AM • Oct 9, 2024
897 Likes 63 Retweets
80 Replies
Will the real Satoshi ever be revealed? Our gut tells us that we’ll never truly know. For the sake of the network, we probably don’t want to know anyways.
While it still stands as one of the greatest mysteries of our time, any further speculations will be nothing more than simply entertainment.
if you haven’t spent a decade enmeshed in completely insane bitcoin lore full time and you wade into the satoshi debate you are going to end up hopelessly confused. sorry to gatekeep but it’s true.
3:15 PM • Oct 9, 2024
155 Likes 5 Retweets
10 Replies
PARTNER
Check your wallet for these odd banknotes
A strange new kind of money could soon start circulating across America.
It's not an all-digital dollar. In fact, you can hold it in your hand and spend it on whatever you like.
But it could change your life in ways you're almost certainly unprepared for.
Should You Invest in Stocks That Add BTC to Their Treasury?
In August 2020, a publicly-traded company on the NASDAQ made history.
For crypto insiders and a number of corporate executives alike, it was the shot heard ‘round the world.
The company announced it had acquired 21,454 bitcoins (worth ~$250 million at the time) in what was described as a “capital allocation strategy.”
We are, of course, talking about MicroStrategy (MSTR).
Since the first purchase, the companies stock price is up more than 1,500% – nearly triple that of BTC itself.
From Q2 earnings. Stock performance since this is much higher.
That level of success has obviously woken up some corporate executives, looking to copy the strategy for their own companies.
Companies like Metaplanet (3350.T) and Semler Scientific (SMLR) have followed, which, like MicroStrategy, plan to use debt to fund their BTC purchases.
This of course leads to the question:
Should you buy Pubco’s that add BTC to their Treasury?
While in general we believe that a company that has BTC on their balance sheet as a part of a corporate treasury strategy is stronger than one without – Lyn Alden has explained this beautifully here – as always, there is a bit more nuance.
There are some risks to be aware of:
1) Timing risk
Buying at the wrong time can lead to underperformance. Just like in your own portfolio, a company buying at the top of a market cycle will cause underperformance.
2) Correlation
The more BTC that a company adds to its balance sheet, the more correlation it will have with the asset.
3) Fundamentals still matter
Adding BTC to their balance sheet is not an automatic recipe for success. Fundamentals still matter.
For example, while Metaplanet has surged by over 700% YTD, Semler Scientific’s stock price has dropped 50% since their Q1 earnings results.
4) Be aware of the scams
Microstrategy’s success has led to a number of companies using ‘treasury announcements’ as a way to boost their stock price rather than as a fundamental change in their business. Be sure to check how much BTC the company is actually buying.
5) How are they funding their purchase?
Companies like Microstrategy use debt to fund their BTC purchases. While this has been a successful strategy so far, leverage can of course impact the company in both directions.
Now compare this to companies like Coinbase (COIN), Galaxy Digital (GLXY), Tesla (TSLA), or most of the miners. When they add BTC to their balance sheet, it’s not with debt. Instead, it’s bought with cash flow. In other words, they are purchasing bitcoin from money generated from biz operations. Which route seems more sustainable to you?
Ignore the noise
The amazing thing about bitcoin is that at the end of this day none of this matters. You can achieve the same level of success as MicroStrategy without having to overpay. Just sit back, dollar cost average your buys, and hold on.
PARTNER
Check your wallet for these odd banknotes
A strange new kind of money could soon start circulating across America.
It's not an all-digital dollar. In fact, you can hold it in your hand and spend it on whatever you like.
But it could change your life in ways you're almost certainly unprepared for.
Most Crypto Investors Favor Dollar-Cost Averaging, Kraken Says
Higher-income investors lean on dollar-cost averaging (DCA) to navigate volatility, while lower-income investors often take riskier paths.
A recent survey by Kraken reveals that 83% of crypto investors have used DCA, with 59% naming it their primary investment strategy.
Why it matters: DCA helps investors mitigate market volatility and reduce emotional decision-making – crucial in the unpredictable crypto landscape.
By the numbers:
46% say DCA's biggest advantage is hedging against market volatility.
24% believe it encourages consistent investing habits.
12% feel it removes emotions from trading decisions.
Between the lines: The wealthier you are, the less you gamble.
Investors earning over $100,000 are more confident and steadfast in their approach:
63% feel “very strong” about sticking to their plan despite market fluctuations.
75% of those earning $175,000–$200,000 use DCA as their primary strategy.
Those making less than $100,000 are more likely to try timing the market:
50.8% of investors earning $10,000–$24,999 attempt to time the market, and only 30.8% use DCA.
Age factor: Younger investors prefer riskier strategies.
50% of 18–29-year-olds try to time the market.
Only 41% of this age group use DCA.
Our take: While DCA is often touted as the go-to strategy for newcomers, it's the high earners who are actually playing it safe. Perhaps it's time for lower-income and younger investors to take a page from the wealthier playbook: slow and steady often wins the race.
PARTNER
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Crypto•com files suit against SEC, discloses Wells notice (Blockworks)
FTX Bankruptcy Plan Approved, Clearing Path for $16 Billion in Repayments (TFTC)
The Q4 Melt-Up: A Playbook to $80K Bitcoin and Beyond (Bitwise)
Babylon,a Bitcoin-staking protocol, attracts $1.4B in deposits (The Block)
Tweet Of The Week
Dillon Newman @Dilnewm
Microstrategy getting awfully close to flippening Coinbase.
$MSTR $COIN
2:48 PM • Oct 9, 2024
6 Likes 0 Retweets
2 Replies
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